RPT-Fitch Affirms CBRE Loan Servicing's Primary and Special Servicer Ratings
Sept 5 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed CBRE Loan Servicing's (CBRELS) UK Commercial Primary Servicer Rating and UK Commercial Special Servicer Rating at 'CPS2' and 'CSS2-', respectively.
The affirmation reflects the growth in assets under management (AuM) in the 12-months to end December 2012, continuing a positive trend seen over recent years. This growth is the result of the company's on-going focus on business relationship development and the non-securitised market. CBRELS has working relationships with new entrants to the UK senior debt market.
CBRELS continues to benefit from the robust governance framework implemented across the CBRE group. The group has accreditation under the ISO 9001/2008 standard which was recertified in June 2013. Within CBRELS, regular loan file reviews are carried out to ensure compliance with procedures and regulation. Clear segregation of duties provides control.
The servicing team at CBRELS is relatively small but highly experienced, with average industry experience and company tenure levels in line with those seen at highly rated peers. The servicing directors' average over 30 years' industry experience, with the staff averaging over 11 years' experience. The servicer is supported by the resources and expertise of the wider CBRE group.
In the 18 months since the last review, there have been significant changes to CBRELS' senior management team. A new COO and new head of primary servicing have been appointed, both of whom had been in place for less than 12 months as of July 2013. Fitch has some general concerns about the potential disruption to the company when such senior management changes take place. However, these are somewhat mitigated by the constancy and experience at director level.
The relatively small number of loans in the special servicing portfolio limits CBRELS' work out experience when compared with peers. However, since Fitch's previous review in February 2012 the servicer has taken proactive steps to resolve two complex loans. The business plans that were implemented on these loans support the agency's positive view of CBRELS' special servicing expertise.
Although the servicing platform in place at CBRELS is not considered as advanced as those at larger peers, it provides the company with a sound, user friendly operating environment.
As at 31 December 2012, CBRELS's primary servicing portfolio totalled just over GBP8.9bn; including 92 loans and 1,964 commercial properties (with UK assets representing 57% and 87% by value and number of loans respectively). The active special servicing portfolio totalled just less than GBP2.7bn, including six loans and 51 properties. The UK special servicing portfolio represented 36% and 50% by value and number of loans, respectively.